A review of the De-Fi scene in April 2021.
1. Investment in cryptocurrency trading projects
CyberTrade is designing, developing and releasing a series of crypto trading projects. Each project implements an essential trading instrument, utilising a decentralised architecture.
Each project represents an opportunity for investors to buy the token of the project (used to fund software development) and to share in the profits generated by the specific trading instrument (e.g. Swing Trading instrument) in the future.
The tokens bought by investors represent equity ownership in the specific project / trading service. The equity tokens provide investors with full rights in the specific trading service, including:-
- Voting rights (Governance of the trading service into the future)
- Profit sharing (A share of the trading fees raised by the service)
- Equity token price appreciation (The price of the service's token on the free market)
Each new project is released (via Uniswap), to provide a new trading service (e.g. Flash Loan Arbitrage) to the retail trading community at large.
2. Investment in the central Design and Development studio
There are limited opportunities for major investors to make equity investments into the central CyberTrade Ltd. design and development studio.
Investing in the (central) design and development studio is separate from investing in the cryptocurrency trading projects that CyberTrade designs, develops and launches.
However, since CyberTrade also retains a share of projects launched, investment in the design and development studio benefits from the 'equity' and 'profit share' aspects of each project launched.
There is also the possibility that the design and studio itself will increase and that its the value of its shares will also increase.
Investment in the central studio is made by the purchase of the governance token of CyberTrade Ltd.
Target Market (Crypto Trading)
1. Crypto Market Size
The upside potential for adoption of the new trading project is very large:-
Total Crypto Market Capital (All 9,000+ Coins/Tokens) = $2 Trillion USD)
Daily Trade Volume = $200 billion (24 hours)
Number of Ethereum User/Wallets = 150m+ (Approx 1m active at any time)
40% of crypto investors are crypto newbies (<12 months), Market growth rate = 50% p.a.
Average newbie age = 35, average investment = $2,500 - $5,000
Primary motive = Capital Growth
Highest 'western' population adoption = USA (14% of population, and rising)
Mobile devices are used to manage the investments of 90% of investors.
Investor professions: Engineers, IT professionals, Trades people, Laywers
Binance is the exchange of choice for 70% of investors
35% of investors, re-invest weekly, 40% of investors re-invest monthly
The problems CyberTrade solves
1. Many new crypto traders put their 'trust' into centralised cryptocurrency exchanges and run the risk of being the victim of a 'hack' (internal or external) or an 'exit scam'.
CyberTrade solves the security problem by providing automated trading via decentralised applications and exchanges. In the decentralised approach the funds being traded are always held securely, in the wallet of the trader.
2. Initially, most crypto investors join the 'passive' / 'buy-and-hold' community. Capital growth is the main objective. However, the value of the capital goes up and down with the crypto market cycles in a stomach-churning, roller coaster ride.
New investors often panic-sell when the market falls and regret it afterwards as the market bounces back. Newbies yearn for more predictable (e.g. straight line) capital growth, in which gains are not constantly wiped out by losses.
CyberTrade aims to remedy both the 'security' and the 'passive' / 'buy-and-hold' problems by providing cryptographically secure, active trading services.
The result being secure acceleration of capital growth.
Automated trading, Alpha Yield and Capital Growth
Alpha yield is created by switching from a 'passive' / 'buy-and-hold' strategy to an 'active' trading strategy. Within Crypto, there are several reliable ways to create Alpha.
One way (not the only way) is to actively trade 'waves' occurring within price cycles.
In the typical (Elliot) wave pattern shown in the graphic, the profit (P) from active trading is produced from three 'long' trades (P1, P2, P3) plus profit from two 'short' trades (P4 and P5). Provided the moves can be anticipated, the Alpha profit is substantially greater than the buy-and-hold profit (X to Y).
The 'Alpha' amount substantially increases the profit, as compared with a passive buy-and-hold strategy, thereby accelerating capital growth, regardless of market direction.
Within Crypto there are several other ways of creating alpha yield, including yield farming, flash loan arbitrage etc. Also, automated trading services may use a moderate amount of leverage and perform short trades, to gain advantage.
CyberTrade - Exchanges and Trading Instruments
The cryptocurrency world encompasses a rapidly expanding range of over 500 Spot and Derivative Crypto Exchanges, implemented using either Centralised or De-Centralised architectures. as of May 2021, the combined trading volume exceeded $200 billion per 24 hours.
The CyberTrade approach is to be 'exchange independent' and therefore at liberty to utilise any crypto exchange that offers a large trader/investor community and/or valuable trading instruments.
In theory, CyberTrade has access to all crypto exchanges. However, In practice, CyberTrade will
- Non-Custodial trading / Trader retains control of funds
- Currency Pair Trading - Short/Long (with leverage), - Arbitrage, DeFi Flash Loan Arbitrage,
- Index Trading, Options / Futures / Perpetual / Market Making
- DeFi Yield Farming, Crypto Commodity Trading, Crypto Forex Trading
/ Smart Contract.
Within the Crypto Decentralised Finance' sector DeFi trading services (aka Recipes or Lego blocks) can be implemented as 'smart contracts'. These are usually Solidity / Ethereum computer programs comprising of a number of trading steps (say, 4 to 20 steps), often executed 'atomically' (In a batch).
Example: In a Flash Arbitrage, all steps are executed atomically. Amazingly, the trade(s) are executed only if there is a profit available. If a profit is not available the execution is cancelled.
In general, most 'smart contracts' contain the following ingredients:-
1. One or more Exchanges
2. A Stake or a loan
4. Trading Instrument(s) (Arbitrage, Currency Pair etc)
Utilising 'composability', combinations of ingredients, are used in trading recipes to produce the desired results. The smart contracts run, on the Blockchain and execute steps / trades at each required Exchange.
Competition to CyberTrade.
Currently, there are a handful of automated crypto trading systems available on the emerging crypto market. The systems fall into two categories:
a) Systems designed for hedge funds (Requires expert-level trading knowledge)
b) Systems designed for retail traders (Requires intermediate-level trading knowledge)
Both categories provide above average returns but require a good level of trading knowledge. This limits adoption to less than 5% of all crypto investors.
CyberTrade has a completely different approach. A central design and development studio, launching a series of projects, each implementing an essential trading instrument, utilising a decentralised architecture.
Each trading instrument is fully automated, suitable for a mass market, by requiring zero trading knowledge.
The automated trading services are downloaded to a mobile phone and controlled (Start / Stop / Deposit / Withdraw) from the (decentralised) dApp..
Revenue Streams & Governance.
Depending upon the nature of each trading service, CyberTrade and its equity investors have several possible revenue streams:-
1. Share of revenues generated from trading fees paid by end-user customers using each trading service on a day-to-day basis.
2. Profit sharing between the end user customer and the equity investors.
3. Share of any monthly subscription required by applicable trading services.
All in all, it will be the province of each trading service governance panel (CyberTrade plus the other equity investors) to manage the revenue model.
CyberTrade shall provide a governance model so that each trading service can be governed in an efficient and democratic way.
High customer growth by removing barriers and sharing profits.
To encourage high customer adoption of trading services, CyberTrade proposes to operate a SaaS pricing model having low/no up-front barriers to entry to the ecosystem:-
Mass Adoption will be encouraged via the following mechanisms.
a) Mobile phone application download.
b) Entry via a 'freemium' / 'trial' levels of entry.
b) Layered upgrades based on more advanced trading instruments
c) CyberTrade / User - Profit Sharing
b) Payment-by-results for trading services / app developers.
c) Low/No administration costs due to automation) Crypto Investor and CyberTrade interests are 100% aligned via trading profits.
User & Revenue Growth
CyberTrade services may be used in both Retail and Financial Institution markets.
In the retail market, CyberTrade expects that the number of crypto investors using the trading services will grow as illustrated in the graphic.
In the Financial Institution market, the number of customers will be relatively small, but the funds invested will be relatively large.
Q1 2022- First Trading service and Token Offering
Q2 2022- Second Trading service and Token Offering
Q3 2022- Third Trading service and Token Offering
Q4 2022- Fourth Trading service and Token Offering
(Based upon current Blockchain CAGR = 50% per year)
(Measured in months of continuous trading operations):
12 months - 3,000 Customers - Revenue $5m +
24 months - 4,500 Customers - Revenue $7.5m +
36 months - 6,750 Customers - Revenue $11.3m +
48 months - 10,125 Customers - Revenue $16m +
60 months - 15,188 Customers - Revenue $25m +
The majority of new crypto investors lack formal training and solid trading experience. This results in 75% of them losing substantial amounts of money in their first year of trading.
Crypto investors can utilise Yield producing trading services, which use automation and Artificial Intelligence to perform trades like a trained and experienced professional trader.
The existence of a real need and genuine CyberTrade solutions, provides a good investment opportunity. Tokens bought for cents can be expected to be worth dollars as the company grows..